Supply Chain

Presented by shriram@ncsi.iisc.ernet.in

Contents:
 What

is supply chain  Supply chain Management  SCOR model  SC Business process integration  References

What is Supply Chain A supply chain is the system of organizations. information and resources involved in moving a product or service from supplier to customer .  Supply chain activities transform raw materials and components into a finished product that is delivered to the end customer. activities. people. .

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Supply chain management  Developed in 1980s. and controlling the operations of the supply chain as efficiently as possible  Express the need to integrate the key business processes.  Supply chain management (SCM) is the process of planning. implementing. . from end user through original suppliers.

production capabilities.SCM The basic idea behind the SCM is that companies and corporations involve themselves in a supply chain by exchanging information regarding market fluctuations.  The primary objective of supply chain management is to fulfill customer demands through the most efficient use of resources  Effective Supply Chain Mgt. is the next logical step towards increased profits and market share  .

and communicate supply chain management practices within and between all interested parties. improve. .Supply-Chain Operations Reference (SCOR )  process reference model  developed and endorsed by the Supply-Chain Council (SCC )  enables users to address.

SCOR is based on five distinct management processes:  Plan  Source  Make  Deliver  Return .

transform product to a finished state to meet planned or actual demand.Processes associated with returning or receiving returned products for any reason. and delivery requirements.Processes that provide finished goods and services to meet planned or actual demand. and distribution management.procure goods and services to meet planned or actual demand. production.  Deliver . Plan .  Source . . transportation management.  Make . typically including order management.balance aggregate demand and supply to develop a course of action which best meets sourcing.  Return .

Pillars of SCOR model The model is based on 3 major "pillars":  Process Modeling  Performance Measurements  Best Practices .

 All market interactions. from your supplier’s supplier to your customer’s customer. from order entry through paid invoice. etc.Process Modeling  All customer interactions. including equipment.  All product (physical material and service) transactions. bulk product. . spare parts. supplies. software. from the understanding of aggregate demand to the fulfillment of each order.

Performance Measurements  Contains more than 150 key indicators that measure the performance of supply chain operations .

Best Practices  The SCOR model defines a best practice as a current. structured. proven and repeatable method for making a positive impact on desired operational results .

Must not be emerging  Structured . enabling technology. Scope.  Repeatable .shows operational improvement related to the stated goal  . Process. business relationship. practice.Current . and Procedure  Proven .  Method.  Positive impact on desired operational results . business model. organizational strategy.Success has been demonstrated in a working environment. as well as information or knowledge management.Has clearly stated Goal.Used in a very broad sense to indicate: business process.The practice has been proven in multiple environments.

joint product development.  Supply .SC Business process integration  Successful SCM requires a change from managing individual functions to integrating activities into key supply chain processes chain business process integration involves collaborative work between buyers and suppliers. common systems and shared information.

Keys of critical supply chain business processes        Customer service management Procurement Product development and commercialization Manufacturing flow management/support Physical distribution Outsourcing/partnerships Performance measurement .

Customer service management process Customer Relationship Management concerns the relationship between the organization and its customers  Successful organizations use following steps to build customer relationships:  establish and maintain customer support  determine mutually satisfying goals between organization and customers  produce positive feelings in the organization and the customers  .

sourcing should be managed on a global basis  In .Procurement process  Strategic plans are developed with suppliers to support the manufacturing flow management process and development of new products firms where operations extend globally.

Procurement process  The desired outcome is a win-win relationship. and reduction times in the design cycle and product development are achieved . where both parties benefit.

customers and suppliers must be united into the product development process. the appropriate products must be developed and successfully launched in ever shorter time-schedules to remain competitive .Product development and commercialization  Here. thus to reduce time to market  As product life cycles shorten.

physical distribution. the customer is the final destination of a marketing channel.Physical distribution  This concerns movement of a finished product/service to customers. and the availability of the product/service is a vital part of each channel participant's marketing effort  In .

but also outsourcing of services that traditionally have been provided inhouse.  The logic of this trend is that the company will increasingly focus on those activities in the value chain where it has a distinctive advantage and everything else it will outsource. .Outsourcing/partnerships  This is not just outsourcing the procurement of materials and components.

Performance measurement  Experts found a strong relationship from the largest arcs of supplier and customer integration to market share and profitability. .  By taking advantage of supplier capabilities and emphasizing a long-term supply chain perspective in customer relationships can be both correlated with firm performance.

Internal measures  Cost  Customer Service  Productivity measures  Asset measurement. and  Quality. External measure  Customer perception measures  Best practices .

tuck.edu/pages/faculty/ dave.dartmouth.mba.pdf  www.pdf  www.wikipedia.com/  en.References  en.org/wiki/Supply_chain  http://www.supplychainseminars.wikipedia.e-lberta/pdf/efc_supply_chain_basics.org/wiki/Supply_chain_management .pyke/case_studies/supply_chain_or_ms.

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